Insurance & Food Factory Construction

1. Insurance & Food Factory Construction Paul Collins

2. Contents • Introduction to Mitsui Sumitomo at Lloyd’s (MSL) • Our approach to Risk Engineering • Historical context – why involve insurers? • Building Regulations for new construction – Fire Safety • Insurers’ requirements for new construction • Summary

3. Non-Life Insurer Ranking in Global Market

4. Introduction - Growth of the Syndicate

5. One of the three core values of MSL:- Underwriting Claims Risk Engineering Use of professional risk engineering consultants Partnership approach with client and broker Practical and innovative solutions Account management philosophy Mutual benefit to MSL and client Reduces frequency and severity of claims Our approach to Risk Engineering

6. Introduction – Who we work with

7. Why involve insurers? • Food industry as a sector has experienced considerable losses – insurers want to be involved

8. Extensive combustible construction No active fire protection Good management standards overall Prompt response from Fire Brigade Business Continuity Plans of little benefit Common features of losses:-

9. It demonstrates a commitment to managing risk Supports a partnership approach with insurers and brokers Insurers have a lot of technical expertise to feed into projects Insurers do not want to have to ask for retrospective improvement on a newly constructed building Involving your broker and insurers at an early stage will ensure no hidden cost further down the line Why involve insurers?

10. B1 Means of Warning & Escape B2 Internal fire spread (linings) B3 Internal fire spread (structure) B4 External fire spread B5 Access and facilities for the fire service Primarily concerned with life safety – complements insurer recommendations Building Regulations – Approved Document BFire Safety

11. Deals with design principles for passive fire safety in food processing factories. Applicable to new builds and extensions Guidance if followed will help to minimise the extent of fire and smoke damage Not requirements, but a useful starting point for discussion with interested parties The principles applied should be building and occupancy specific FPA Food Processing Factories 1: Design Principles

12. The specification of the construction of the building will include the following considerations: The types of processes to be undertaken The nature of, and fire hazards represented by, the equipment and goods in the building, and in particular their likelihood to support fire development The fire load within the building The financial exposure. FPA Food Processing Factories 1: Risk Assessment

13. New buildings & extensions: Hazards should be considered and understood Can the hazards be replaced, or re-engineered to minimise the risk? If not; will management controls be sufficient to reduce the risk to an acceptable level? Ultimately, specific recommendations on construction including compartmentation or active fire protection may be made FPA Food Processing Factories 1: Risk Assessment

14. Insurer recommendations for fire protection will be based on a number of factors: The severity of the hazards presented The asset values of the facility The business criticality of the site Food companies should consider Reputational damage caused by a loss or interruption Loyalty of customers in the event of an interruption to production Future access to insurance market at viable insurance rates FPA Food Processing Factories 1: Risk Assessment

15. LPCB/FM approved panels or non-combustible construction is normally a requirement Insurers may have a preference for non-plastic based insulation – mineral fibre, stone wool etc. All panels must be installed in line with their approvals – stitching, unsupported panel length, orientation etc. No polystyrene!! FPA Food Processing Factories 1: Construction

16. Detailing of service penetrations needs careful consideration Flue and service penetrations through panels need to be carefully detailed Fire stopping of services and detailing of fire walls, shutters will need FPA Food Processing Factories 1: Construction

17. High hazard processes may need separation Fryers Ovens Thermal oil systems Specific guidance provided in design guide Plant rooms – electrical, ammonia refrigeration, vacuum pumps Between storage and manufacturing FPA Food Processing Factories 1: Fire separation

18. Consider sprinkler protection Up to 70% premium discount for fully compliant systems Minimises down time following a fire as uses less water than brigade Reliable, proven track record of fire control Provides further flexibility in the design Automatic fire detection – Full coverage L1/P1 to BS 5839 Pt 1 desirable Specific hazards may warrant localised fire protection Fryers Ovens Thermal oil boilers Critical plant rooms Dryers FPA Food Processing Factories 1: Fire Protection

19. Services Lighting – suitably specified, IP rating…. Power – location of transformers… Redundancy of supplies generally DSEAR Hazardous zoning Rating of electrics Explosion suppression/venting Undertaking the operational risk assessment Other considerations

20. External Areas Where will pallets and plastic trays be stored Proximity of other plant and equipment – silos, oil storage Cold weather precautions Vulnerability of equipment to freezing Roof void temperatures Fire pump houses Non heated areas Other considerations

21. When it goes wrong Managing Change – Thermal Oil Installation • New thermal oil installation • Serious design flaws • No professional project management • No insurer involvement • Poor housekeeping & maintenance • No method statements. • Enclosure deficiencies. • Expansion pipe routed internally • Combustible panels not adequately cut away • No retention to the thermal oil enclosure

22. Food production facilities provide some complex risk engineering challenges Due to large losses in the sector associated with legacy issues, new builds come under scrutiny Early engagement with brokers and insurers is essential for new builds and extensions Not all elements of the design will meet insurers’ initial recommendations – compromises need to be discussed Construction materials still key issues for insurers Summary

23. Higher fire risks must be compartmented or have fire protection systems (or both) Investment in incorporating insurer recommendations at the design and construction phase will ensure businesses obtain the most competitive insurance terms in the future Summary

24. Thank you - Questions?